Ryan Mallory of SharePlanner.com says to "...be careful" when trading given the recent market action. Here he offers a list of bullish trade setups, although he urges traders to hold off on making any major additions to the long side.
The bulls are not on their best behavior these days.
Much of it is to do with digesting recent gains during August, which is why we haven't seen the kind of selling that was experienced on July 31 of this year.
Nonetheless, it doesn't hurt to have a combination of long and short positions in your portfolio right now. Stocks are acting very similar to what we saw back in July where the indices weren't necessarily eroding away, but, under the surface, the selling was pretty heavy.
With that, you have momentum stocks taking an absolute beating with social media stocks like Facebook (FB) and Twitter (TWTR) being decimated. Not to mention Tesla (TSLA).
So be careful, there are plenty of long setups out there, but until this market wants to get aggressive to the long side, I'd hold off on making any major additions to the long side.
Here's the bullish list of trade setups:
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By Ryan Mallory, Founder, SharePlanner.com
